Investec Global Dynamic Resources Fund

of Global Commodities and Resources of Investec Asset Management, previously worked as an executive director in Goldman Sachs, focusing on natural resources. Bradley has little experience in the fund management industry.

George and Bradley are also supported by Daniel Sacks, co-manager of Investec Global Gold Fund and Adrian Jackson, an energy investment analyst. Dawid Heyl, a recent addition to the team as well as to the company, will be responsible for soft commodity sector.

Investment Strategy
Although Investec Global Dynamic Resources Fund uses a composite index of 50 percent MSCI Energy Index and 50 percent MSCI Materials Index as its benchmark, it is relatively benchmark free. In terms of sector, the fund could invest in precious metal, soft commodities or related commodity stocks. By doing so, the Fund may catch any long-term trends among various types of commodities through flexible sector allocation. Management adopts a combination of top-down and bottom-up approach. The top-down analysis focuses on sector allocation across 62 types of commodities while stock picking relies on bottom-up procedure.

In addition to commodity stocks, the Fund may gain direct exposure to commodity futures prices via Exchange Traded Commodities (ETCs). The allocation to ETCs depends on management's top-down analysis with a cap of 20 per cent of the total asset. The Fund can also invest in derivatives with a cap of 5 percent for hedging.

The relatively benchmark free investment strategy and both indirect and direct exposures to commodities add flexibility to the fund as well as attractions to potential investors. However, the success of such strategy would highly depend on whether or not management could make good use of the flexibility. On one hand, Investec Group has a strong reputation in management of commodity funds through long-term consistent performance of several commodity funds it offers, such as Global Energy Fund and Global Gold Fund. On the other hand, lack of tracking record for the Global Dynamic Resources fund and a relatively young management team make us cautious.

Over recent years, almost all kinds of commodities have enjoyed a strong bull run. The broad investment universe of the fund may not help too much in diversifying risk. Notably, the 3-year correlation (as of December end 2007) between MSCI Energy Index and MSCI Materials Index is 0.76, indicating two sectors highly positively correlated. In addition, the Fund will maintain a focused portfolio with around 30 to 50 stocks. Putting together, the fund may probably earn appeal from risk-lovers.